The Poverty Of The World Bank

MANILA: If you look at the word cloud above, from its own website, the World Bank is focused on poverty alleviation, adjustment, reduction, halving – but not liberation. That's a clue about how this world agency looks at solving global poverty, thinking from poor to not-so-poor.

It was on 17 October 1987 when a hundred thousand people gathered at the Trocadero in Paris, "to honor the victims of extreme poverty, violence and hunger." Those gathered "proclaimed that poverty is a violation of human rights and affirmed the need to come together to ensure that these rights are respected." The Trocadero is where the Universal Declaration of Human Rights was signed in 1948. On 22 December 1992, the UN declared 17 October every year as the "International Day for the Eradication of Poverty" (un.org/en).

So, how does the UN propose to eradicate poverty?

Current patterns of production and consumption, for example, are neither meeting the current needs of millions of people who live in extreme poverty nor sustainable. A sustainable future requires social change that respects and protects human rights, cultural diversity and the environment, reduces economic inequalities and achieves social inclusion everywhere. It requires economic growth and development that does not plunder and destroy our natural resources or undervalue labor, but actively protects our environment and supports workers’ rights. The success of this transition towards a greener and fairer economy goes beyond mere reliance on better technology and more investment. Our increasing economic, social and environmental interdependence requires that we must also build sustainable and mutually respectful relationships between and among individuals, communities and nations, and better share knowledge at all levels.

Very complicated. Is the World Bank on the right track? In the Philippines, it can point out that it is funding the $508 million Philippine Rural Development Project (PRDP) through the Department of Agriculture (DA), and that the PRDP knows what to do as it has determined that:

Inadequate infrastructure for product transport and limited marketing assistance – resulting (in) poorly developed commodity value chains – are the main reasons of poverty in rural communities.

The PRDP is a 6-year project via the DA; its ultimate aim is to increase farmer household income by at least 5% annual throughout the project's life.

In a press release a year ago, the World Bank said the PRDP will benefit directly 2 million farmers and fishers, indirectly 22 million people, 10 million of them women (30 August 2014, worldbank.org). It's loans and grants. "The assistance aims to raise rural incomes and reduce poverty in the country." More than 70% of that will go into infrastructure: roads, bridges, tire tracks, irrigation, water systems, production & postharvest facilities, fish landings, fish sanctuaries, storage facilities, trading posts, greenhouses, solar driers and slope stabilization works, the World Bank said. I know we need all those for better transport, reduced travel time, and improved access to markets. This should also encourage farmers to increase and diversify production and engage in value-adding activities, increasing their incomes.

I also know that subtracting 70% from $508 million, or $356, leaves $152 million for other than infrastructure, that is, for technical assistance, training, market linkages, and financial assistance. If you now divide the remaining amount by 2 million, the number of target farmers, you have $76 to spend for every warm body within 6 years, or $12.67 to spend every year to emancipate an individual farmer from poverty.

That is what I call the poverty of the World Bank!

Oh, the World Bank is wealthy, of course, except in ideas in this field at this time.

Now, I happen to be rich in ideas; here's my suggestion:

The World Bank allots $152 million (P6 billion) for the PRDP to award as loans to 1,000 multipurpose cooperatives (MPCs) all over the country, that is, P6 million for each MPC, to provide the farmer-members production, processing, and marketing support, from seeding to selling.

Why multipurpose cooperatives? Because I know the MPCs. Cooperatives are the last bastion of democracy in this country. I am the Vice Chair of the Nagkaisa MPC in my hometown, Asingan in Pangasinan; I have also for the last 2 years been a consultant with the Department of Agrarian Reform (DAR) engaged in improving the lives of agrarian farmers individually and as a collective. Differently, they call their MPCs by the name Agrarian Reform Beneficiaries Organizations or ARBOs; nonetheless, the MPCs and ARBOs have the same aspirations – emancipate the farmers from poverty.

Why do I ask for (a) production, (b) processing, and (c) marketing assistances? Because I know farmers need cash or credit all year through; if they don't get a friendly loan, they turn to the usurer, who is always awash with cash. The farmer needs to buy seeds, fertilizers, and pesticides; his family has other than farm needs, but he has to attend to those too. After harvest, he needs to dry the grains very well to get the optimum price, but he cannot afford a dryer. When he needs to sell, and it is always right away, he sells to the highest bidder – if there is any. He is always a victim of the manipulations of the marketplace. Merely linking him to the market is leading the lamb to the slaughter!

What that all means is that the poor farmer is a financial disaster waiting to happen at harvest time; in a season of plenty, the farmer is broke. All because of the onerous loans he has to pay the moneylenders for his seeds, fertilizers, pesticides, family needs – and they are waiting at harvest time for their pound of flesh. As to his farm produce, he has to submit to the dictates of the merchants, to robbery in broad daylight.

If you want to emancipate the farmers from their poverty, look no further than the moneylenders and the merchants, who often are one and the same body – gobbling up what values the farmer adds to the production to the marketing chain. Pity the poor farmers.

That is why I am proposing what I shall refer to here as the PRDP Cooperatives Rescue Plan, to allot at least P6 billion in order to set up 1,000 model MPCs all over the country. I call it Rescue Plan because as of now, the cooperatives are also victims of merchants in the marketing of their members' produce. To enjoy the value chain, the coops need to market directly to consumers, big & small.

To ensure that the P6 million loan to each coop will be very well taken care of, the Coop's Board should be completely overhauled so that it becomes a community partnership of government, science, industry, business, philanthropy, NGOs, civil society, church, and the peasantry. A religious member of the Board should be able to watch over the morality of each transaction. Three farmers should also be included as Board members, to ensure ground-level thinking, from poor to rich. Which is where the World Bank should have started thinking about PRDP in the first place.

When the World Bank begins thinking from poor to rich, then we can all begin thinking and celebrating the International Eradication of Poverty!